The group, commonly known as the Dixie Mission, established the first official diplomatic and military contact between the United States and the Chinese Communists. Many of its members later became victims of McCarthyism. Davies saw the mission as means to prevent, or at least decrease, Soviet influence over the Chinese Communists. As time progressed, Davies also saw the Communists as a suitable alternative to the Kuomingtang.

Report by Davies from January 4, 1945, warning of Russian influence over Chinese Communists. Page Two and Page Three

After General Stilwell's recall, Davies served briefly under General Albert Coady Wedemeyer, and also General Patrick J. Hurley. The last three months of 1944 were to prove his last in China, as Davies found himself increasingly at odds with Hurley, who was appointed acting ambassador to China in mid-November. The main point of contention between the two men were their views on the future of China. Hurley advocated for a unified government of Communists and Nationalists with the GeneralissimoChiang Kai-shek at its head. Davies, meanwhile, believed that not only was a coalition impossible to form, but that Chiang's regime was ultimately a dead end for American policy in China. Further, Davies believed that the Communists were the future of China.

Davies visited Yan'an, China, twice. The second trip, in mid-December, resulted in an intense argument with Hurley over Davies' motives. Hurley accused Davies of actively working to undermine Hurley's unification talks between the CCP and the KMT. At this time, Hurley undertook work to finalize Davies' transfer out of China to Moscow. A second argument in the first week of January, resulted in Hurley threatening to destroy Davies' career and accusing the Foreign Service Officer of being a Communist. Davies departed China for good on January 9, 1945.

Davies and several others, including Eric Sevareid and a Chinese general, were flying from India to Chongqing in 1943 when the plane developed engine trouble and the occupants were forced to bail out over the Burmese jungle, in an area inhabited by the Nagaheadhunters. Davies led all the passengers to safety and, in 1948, was awarded the Medal of Freedom.[1][2]

After the war, he served as first secretary in charge of the political section at the United States embassy in Moscow; on the State Department's policy staff; with the High Commission for Germany; as director of political affairs at the German Embassy; and finally, as counselor and chargé d'affaires at the Peruvian Embassy, until his dismissal in 1954.

Davies was an acknowledged expert on China, one of the China Hands who knew China and the Far East best in the State Department. He predicted that Mao Zedong's Communists would win the Chinese Civil War, and, after they did so in 1949, he advocated US relations with Communist China to forestall a Soviet takeover.

Unfortunately for Davies, these views ran directly counter to prevailing policy, which viewed all Communist countries as one monolithic enemy, and which had supported the Kuomintang. The "China lobby", supporters of Chiang Kai-shek, were looking for those who had helped lose China, and Senator Joseph McCarthy was looking for any Communists he could find. Davies was attacked as both.

Nine investigations of Davies' loyalty between 1948 and 1954 failed to produce any evidence of disloyalty or Communist sympathies. His opposition to Communism was a matter of record; indeed, in 1950 he had advocated a preventive nuclear showdown with the Soviet Union. Nevertheless, in 1954, under political pressure from McCarthy and Senator Patrick McCarran, Secretary of State John Foster Dulles asked Davies to resign. He refused, and on November 5, 1954, Dulles fired him, claiming he had "demonstrated a lack of judgment, discretion and reliability."[3][4]

After the end of his diplomatic career, Davies returned to Peru and, with his wife, operated a furniture business. Their company, Estilo, won the International Design Award twice. The Davies family returned to the United States in 1964. After a protracted battle, Davies was finally exonerated and regained his government clearance in 1969. The family moved to Málaga, Spain in 1972, to France and England, and finally back to the US.

^Bernstein, Adam (December 24, 1999). "China Expert John P. Davies Dies". The Washington Post. p. B06. In 1948, he received the Medal of Freedom for an event that had occurred four years earlier and was described in Eric Sevareid's book "Not So Wild a Dream."